binder

Binder

An amount of money paid to indicate good faith in a transaction before the transaction is completed.

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Binder

A small amount of money that a seller requires a potential buyer to deposit before a transaction is completed. The binder ensures that the potential buyer is serious about the transaction and will be likely to complete it. If the buyer subsequently withdraws from the deal, he/she usually forfeits the binder. Binders are common in real estate and securities (where it is usually called a good faith deposit). Binders reduce the risk to the seller. It is also called earnest money.

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binder

(1) Money given as earnest money for an oral contract to purchase real estate, to bind the parties until such time as they can complete the necessary written contract. (2) A written instrument giving immediate casualty coverage for property, even though the insured may not have paid a premium or received a policy.(3) A temporary contract of title insurance in which the insurer agrees to issue a final policy if certain exceptions, such as prior mortgage liens, are removed at or before closing.